Contingencies That Homebuyers Should Include in a Purchase Contract

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Contingencies That Homebuyers Should Include in a Purchase Contract
Real Estate

Real estate purchase contracts typically include contingencies that specify certain conditions to be met prior to closing. Some of these contingencies include inspections, financing, insurance, and other requirements that must be fulfilled before the sale is final.

Buyers and sellers may include a number of contingencies in order to protect themselves before closing, including:

Home inspection.

If you are a buyer, you should always have a home inspection contingency so you know exactly what you are buying. You must do this prior to close; after the sale, it’s too late and you don’t want to waste time and/or money trying to pursue a seller for a remedy. Closing should be made contingent on a satisfactory inspection report.

Title report.

A title report details all the information available from a public records title search to help buyers determine if they should proceed with the transaction as well as whether title insurance will be required. The report typically includes:

  • Information on the property and the owner.
  • Legal description of the property.
  • Property tax information, including any outstanding taxes owed.
  • Notice of any liens or encumbrances against the title.
  • Information on any existing easements.
  • Any covenants, restrictions, conditions, historical rules, and oversight.


Often, buyers want a financing contingency in place, which is where the buyer conditions the sale of a home on the seller securing financing to buy the home within a certain period of time. Even with COVID-19 still having a major impact on our lives, people are still buying and selling homes. The Phoenix metro area is currently a buyer’s market and sellers tend to prefer buyers bringing all-cash offers so, depending on your circumstances, a financing contingency may not even be necessary.


If you are financing the purchase of your new home, your lender will require you to carry a homeowners’ insurance policy. But even if you’re paying cash, you still want to protect your property. However, some insurers may not insure against everything you as a buyer want covered. Homebuyers might want the inclusion of an insurance contingency just in case they cannot get covered to their satisfaction.

Some contingencies may become a matter for negotiation, such as when a buyer wants to make the closing contingent on the sale of his or her existing home or when a seller wants to make the sale contingent on finding a new home to purchase.

All contingencies should be put in writing and should be agreed to by both buyer and seller. Having an Arizona real estate attorney involved in the purchase or sale of your home will help you ensure the process goes smoothly and that all the contingencies you need to protect yourself are successfully negotiated.

Our real estate attorneys represent parties on either side of real estate and financing transactions, including buyers, sellers, landlords, tenants, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We advise, structure, negotiate, and document a variety of real estate and financing transactions, including leases, purchase and sale agreements, financing agreements, and development agreements for a variety of commercial and residential projects. Contact us today and learn how we can help.

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